Taxation & the state of the State

Posted: 13/01/2008 in taxation
Tags: , , ,
In the past few days, a lot has been said about Baldacci’s ‘State Of The State’ speech. Which is actually pretty surprising, since he really didn’t say that much. Perhaps the most vocal discussion of his speech has come from the ‘Welfare’ crowd. His immediate plans to counter this $95 million shortfall by making cuts to DHHS and other aid programs gave rise, even before he made his speech, to countless protesters across the state, with the Hall of Flags being packed with recipients and supporters of the same ‘Welfare’ crowd.

I wonder how this display of solidarity amongst the demonstrators came to be planned. Baldacci didn’t publish his speech before hand, did he? Or maybe he did, and I missed it in amongst all of the web searches I made concerning the speech. I have no wish for the truly needy to be denied basic requirements, such as health care, food, and heat, but let’s face it, there are a lot of people on welfare that don’t need to be on welfare. There appears to be an incredible amount of corruption involved in the administration and receipt of these benefits here in Maine.

But most of the contention seems to be revolving around this $95 million shortfall, that actually doesn’t exist. I was asked yesterday what in hell I was talking about. Retailers are screwing the state and not paying what they owe, was the comment made in conjunction with the question. So let’s go back and look into this comment, as this is what the implied shortfall is based on.

Most people are aware of what a gift card is, or appears to be. Many people presume it to be a sort of ‘prepaid credit card.’ That really isn’t what a gift card is, it just seems like it. Because state revenue in the way of sales taxes collected are lower than expectations placed the collections at, Maine has made less money than anticipated. When you or I prepare a household budget, we base the income portion on our salaries. It’s easy for most of us, because we get a paycheck every week, and it’s always the same. We know we have X number of dollars to spend after taxes have been taken out every week. (Or whatever your pay period is)

In an effort to cover a bad guess, which is exactly what a prediction for the future is, the state of Maine decided to go after some of the millions in uncollected or unused gift card balances. If the cards had been used, than sales tax would have been collected, and there would be no problem, right? But instead, revenue was less than predicted. And that has always been the problem with running a government. They don’t collect a paycheck, they collect taxes. And taxes are not an assured income.

On 24 December I discussed exactly what a gift card is, and why the State has no right to lay claim to one penny of those gift card dollars. I suspect that even though the AG is going to do whatever Master Baldacci wants him to, in the end it will amount to nothing. They realize it, and have to act fast to cover the error their guessing game made in predicting income for the state.

The bigger error from the Baldacci throne is in thinking a Socialist way of life is what the people of Maine really want. The big drag on the State’s budget, and the real reason why they can’t come up with viable figures is because of the State run universal health care program, called Dirigo. Consistently falling short of expected enrollments the program cannot support itself, like a free capitol insurance plan would. They keep having to dump money into it to pay the bills. And now that an error has been uncovered and we may (probably will) have to pay back funds received to the Federal Medicaid program. The sum of this equation equals Panic.

This article I dug up from May of last year addresses some of these issues. Continued below

I believe that one of the biggest hurdles we face in the coming electoral process is the tendency for the mainstream media to publish opinion, rather than fact. Baldacci & Co. have been touted as great leaders by the press in Maine. Too often politicians tell us what they think we want to hear, instead of what we need to hear. And the press is guilty of telling our politicians what they want them to think we want to hear.

We need to begin to take a closer look at the candidates running for President, and then start looking at anyone running for lower level positions. What do the candidates really stand for? Are they telling you what they think you want to here, or what you need to hear. I feel that one of the indicators that determine what a candidate is saying is the consistency of their stand on an issue, especially the controversial ones.

One of the most controversial issues in any campaign is taxation. I think we can all agree that taxation, as much as we hate it, is necessary for a government to function. And we do need a government. The Fair Tax proposal is one of those plans that many in government do not want. It rewards a free capitol economy, but punishes a Socialist economy. Income for the Government is limited to what the public wishes to purchase. While I do not necessarily agree with the proposed rate, I do like the concept and philosophy behind the plan.

Here’ what Mike Huckabee has to say about it. And he stands behind what he says, even though his position is controversial.

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